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Sunday, March 03, 2013

Plaza Tower Tallahassee Coming Back From Bankruptcy

This beautiful downtown structure is the Plaza Tower. It is located in the heart of Tallahassee.

The tall phallic building is the Florida State Capitol. In front of it is Plaza Tower. The red brick building is City Hall. The white building to the right of Plaza Tower is the Florida Supreme Court - the one that rigged the election for George Bush.

The Plaza Tower is on Kleman Plaza - the city's beauty mark - the home of festivals and other city functions.

About six years ago - the developer Kleman Plaza LLLP started work on a 200 unit luxury condominium within a block of the Florida State Capitol. It seemed like a sure thing offering new condos so close to the government and FSU for about $250000. When it opened - Lulu and I personally considered moving there. Who wouldn't want to live downtown - within walking distance of the county court house - the city hall - and the state capitol and Florida State University. Lulu could easily walk the less than 1/2 mile to her office daily. We could exist on one car and a Vespa.

The recession hit - the developer went bankrupt - the building has been tied up in court for 3 full years. The is outstanding debt on the building of $64 million.

If they sell the remaining apartments for $250000 each - they would make $47 million.

The building has now reverted to the lender's ownership. They can now start selling units again.

A foreclosure case involving the Plaza Tower condominium development ended Friday with the lender taking control of the downtown property.

That means condo sales in the building will soon begin again — only 21 of the 201 units in the 23-story building had been sold before the project’s developer sought bankruptcy protection in 2009.

Margaret Correoso, attorney for 300 South Duval Associates LLC, was the sole bidder for the building, which will revert to the lender’s ownership.

Over the next 10 days the deed recording and transfer take place, though developer Kleman Plaza LLLP can exercise its right of redemption during that time if able to satisfy the lien on the property, Correoso said.

The lender, 300 South Duval Associates, whose managing member is the Union Labor Life Insurance Co., received a final judgment in the foreclosure case of $64.5 million. According to court records, that figure includes $51.7 million in principal owed on the project’s financing and nearly $13 million in accrued interest.

Realtor Russ Sykes, who is the condominium owners association’s board president, said the end of the three-year foreclosure proceeding sets the stage for the condo units to be marketed for sale.

“After about 10 days from now we will be in a position to hopefully resume sales on the available units at Plaza Tower,” Sykes said after the sale concluded at the Leon County Courthouse. “It’s been three years in the making. I am happy this day has arrived.”

The building is 23 stories tall and its construction is 95 percent complete, The 21 previously sold residences in the building were excluded from the foreclosure.

Kleman Plaza LLLP also built 36,532 square feet of retail and office space in the development and 682 parking spaces. None of that commercial space was ever leased.

Construction began in 2008 but faltered as the recession hit and the real estate market collapsed. The developer, which struggled with projects in other states, went bankrupt in 2009.

Having the prominent mixed-use development back on track will be a boost to the downtown area, said Michael Tomkiewicz of law firm Broad & Cassel, which represented 300 South Duval Associates. “It’s going to help the Tallahassee community,” he added.

ULLICO, the insurance company, had invested money in the project as part of the investment portfolio it maintains in equities, real estate and other holdings.

“They are a large company and a well-funded company,” Sykes said. “They are not bound by being under pressure. They don’t have to sell. It is my understanding that they will see this project through.”

When the last condo unit sold in 2009, there were still 80 other purchasers who had contracts pending and who had made deposits. Those deals stopped when the foreclosure began.

“I don’t know that all 80 of those will close, but a substantial portion of them will,” Sykes said.

He suspects there will be interest from buyers looking to be a block from the Capitol and the Supreme Court, plus investors who may want to buy a unit they can lease. Sykes said another market is what he called “end-users” who may want to give up maintaining a big house, yard and pool.